Number of green BTL products up significantly

The last year has seen a surge in the number of ‘green mortgages’ offered to buy-to-let landlords.

Data from BTL broker Mortgages for Business shows that at the start of March this year there are now 353 green products available. This compares to just four products being available to landlords 12 months previously.

The number of products has increased steadily over the past seven consecutive months, and now make up 15% of all BTL products on the market.

Within the BTL sector, there has been a particular focus on green deals when it comes to limited company products. In total there were 244 deals available to this sector in March, with green products now accounting for 19% of all limited company BTL mortgages.

Mortgages for Business managing director Gavin Richardson says: “There are now 353 green BTL products — a level not reached since our records began.

“This demonstrates not only the recovery in the BTL sector but also the willingness of lenders to innovate.  While there are more green products for individual owners – there are now 312 on the market – the most marked increase was in limited company lending, where the number of products has risen by more than fivefold since August last year”.

He adds: “The government has committed to making Britain carbon-neutral by 2050.  Upgrading existing housing stock with energy efficient improvements and making new-builds even more green can lower the sector’s carbon emissions.” He points out that the 14% of UK’s total carbon emissions come from housing – a higher carbon footprint than the farming industry.

However, Richardson adds that the cost of making homes more energy efficient can be costly for landlords. “The average bill for landlords looking to improve their property is between £6,000 and £15,0000.  When we asked them, only 38 per cent of landlords told us that they could afford to invest in making their BTLs more energy efficient.

“So mortgage lenders have a huge part to play in helping landlords to fund their efforts — they have a responsibility to provide the facilities to allow landlords to fund this.”

Just under a quarter of landlords’ properties have an Energy Performance Certificate (EPC) of D or below.  The problem of updating properties is exacerbated by older housing stock in the UK Some 36% of properties in the private rented sector were built before 1940.

Proposed regulations state that new tenancies should have an EPC rating of C or above from 2025, and all existing tenancies should get to that rating by 2028.  Recent research from Landbay suggests only half (54%) of landlords with one to three properties know about the government’s EPC requirements. However 80% of portfolio landlords, with 10 or more properties, and 70% of those with between four and 10 properties were aware of these potential changes.



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